Summary

Where the defendant was the accidental owner of a small piece of land that it never intended to acquire from the claimant and that was of no use to it except as a means of extracting a ransom payment from the claimant, rectification of the transfer and of the land register was warranted in light of the parties' common continuing intention in respect of the amount of land to be transferred, and despite the fact the defendant was a proprietor in possession.

Facts

The claimant pension trustee (H) sought rectification of a land transfer and of the land register in relation to a transfer of a parcel of its trust land (the H parcel) to the defendant property company (C). H initially sold part of the trust land, including the H parcel, to a developer (L) who had purchased adjoining land for retail development, and who afterwards vested it all in C. H had had no direct dealings with C. L had constructed a road reaching into the H parcel and, with C, had made a draft agreement with the highway authority that part of the road would be adopted. The limit of the adoption was not stated at first, although a provisional plan was attached. Later, the limit was agreed formally at a different point. When H sought to develop its own adjoining land for residential use and had to offer the remainder of the road for adoption, it realised it could not do so because the combined effect of the transactions had left C with a "ransom" strip of land. H submitted that the conveyancing should have been done with reference to the point in the formal agreement with the highway authority and that the mistake was curable by rectification. C submitted that, whatever had been agreed or intended by H and L, C had never had the intention of acquiring anything other that what was transferred to it. C contended that there could not have been an agreement linking the relevant boundary to a limit of adoption indicated by the highway authority at the point claimed, because the documentary evidence gave no such indication until too late a date and the correspondence was not consistent with it.

Held

For H to succeed, it had to show that the parties had had a common continuing intention regarding the amount of land to be transferred by H; that there was some outward expression of accord in relation to it; that the intention continued at the time of the transfer; and that by mistake the transfer did not reflect that common intention, Swainland Builders Ltd v Freehold Properties Ltd (2002) EWCA Civ 560 , (2002) 17 EG 154 (CS) followed. On the evidence, the only plausible explanation for the inclusion of the H parcel in the sale was that it was known it would be required by the highway authority if the road was to be adopted up to the entrance to the development site, rather than to the point that was apparently required for planning permission. C had wrongly believed that it was a condition of retail planning permission that H's land be acquired for a vehicle turning area, whereas the turning area was required if the highway authority were to adopt a certain section of the new road. H had agreed to sell up to a certain line, and C had intended to buy up to there and no farther. The fact that C had not had a clear understanding of the basis of the requirement did not mean it could later deny its intention. Accordingly, H and C had had a common continuing intention in respect of the amount of land to be transferred by H. There was a sufficient outward expression of accord in a letter from L's solicitors to C's solicitors and an accompanying plan. Although C was a proprietor in possession for the purposes of the Land Registration Act 2002 Sch.4 para.3, it would be unjust not to order rectification of the register. C was the accidental owner of a small piece of land that it never intended to acquire and that was of no use to it except as a means of extracting a ransom payment from H.

Judgment for claimant.